Leaders Index 2-13-20

The market showed some modest declines today, but it was overall a solid session. There were early losses after the Chinese increased the number of people infected with the coronavirus due to a change in its counting method. The market recovered the losses fairly quickly and showed some modest gains. Some late selling saw the major averages finish off their highs, but all the major averages closed in the upper half of their intraday trading ranges after making intraday new highs. The declines were pretty evenly spread around with the COMPQ and the NDX losing .14% and .18% respectively. The SPX was lower by .16%. All modest declines. Volume was lower across the board. It fell by 5.04% on the Nasd and 13.81% on the New York. There was some strength in small and midcap stocks as the RUT gained .26% and the MID was higher by .28%. Leading stocks were mixed to slightly lower as well with the leaders index declining .16%, about in line with the overall market. The index closed in the upper half of its trading range and volume was slightly lower but still above average. The action of the market was actually pretty positive today. There were early losses on an overnight news story, but the market bottomed out quickly and rallied for most of the remainder of the session. Some late selling saw the major averages finish off their highs and in slightly negative territory. Volume came in lower on the day, showing that large institutional players were not selling stocks heavily. The leaders index continues in a consolidation and is close to breaking into new high ground. If this were to happen, particularly on heavy volume, it would be encouraging. There are some yellow flags out there, like the divergence in the advance decline lines of the major averages and the recent Hindenburg signals. These are however imprecise indicators and are warning signs but don’t tell you when a market will top. Right now the market is acting like it doesn’t want to go down. When that happens the market usually goes up, at least in the short term. Jerry